Interview with John Eriksson, Widman & Hannes Snellman Ab – Assessing proposed changes in Finland

In January this year, the Finnish state prosecutor – Christer Lundström – gave his decision during the pre-investigation phase against PAF and its representatives.

The Finnish state prosecutor deemed PAF’s Internet gaming operations illegal but decided not to prosecute and waived the charges.

According to the State prosecutor, PAF’s activities were illegal due to the fact that PAF’s gaming site had been translated into Finnish and acknowledged that PAF, in different ways, targeted the Finnish market.

One of the signals that state prosecutors gives to the Finnish gaming market, by waiving the charges against PAF and its representatives, is that the Finnish authorities are waiting for the proposed changes of the Lotteries Act to come into force, says John Eriksson, an associate lawyer at the law firm Widman & Hannes Snellman Ab.

Of late, Finland has been in news for debating a countrywide ban on gambling marketing.

In order to know more, Bulletbusiness.com spoke to Eriksson about the current issues. Excerpts:

Could you summarise major developments in your jurisdiction of late as far as online gambling is concerned? How do you foresee online gambling sector opening up?

Considering the recent media occurrences in Finland , it can be concluded that companies in the Finnish media sector believe that – after the proposed amendments of the Finnish Lotteries Act come into force – all advertisement of gaming services has to stop and all foreign newspapers and magazines which include advertisement of gaming services can no longer be sold in Finland.

MTV Oy – one of the biggest multi-media/TV groups in Finland – has already cancelled advertising and other cooperation agreements with gaming providers.

With regard to the pending proposed changes of the Finnish Lotteries Act and the new government report, containing proposals for further strengthening of the gaming monopoly in Finland, it can be concluded that the Finnish gaming system will not open up in the near future.

Can you provide an insight into the proposed changes under the Finnish Lotteries Act and how would this strengthen the Finnish state controlled gaming monopoly and at the same would result in further restrictions of the free movement of services within the Community?

By expanding the definition of marketing in section 4 of the proposed Lotteries Act to include “indirect advertising” and other marketing measures, the Government is also expanding the prohibition in section 62 of the Lotteries Act against marketing and organising gaming services without a licence. These proposed changes also apply on marketing and organising online gaming services.

By also introducing stricter penalties for lottery offences, the Finnish authorities create a more effective system for keeping online gaming operators outside the Finnish market.

Therefore, the proposed changes of the Lotteries Act strengthen the Finnish state controlled gaming monopoly and results in further restrictions of the free movement of services within the Community.

Considering the motives given in the proposition and the fact that the definition of marketing has been expanded, one can make the assumption that the amendment of the prohibition in section 62 of the Lotteries Act will result in that the Finnish authorities – after the proposed changes come into force – will take further actions against media and gaming providers that advertise and/or organise gaming services without a licence for the Finnish market.

It has been stated that one of the reasons behind why the state prosecutor gave his decision in January 2009 was that the Finnish Office of the Chancellor of Justice gave him an ultimatum to end the pre-investigations, which had been pending for two years, before February 2009. How do you expect the stance of the authorities as far as creation of a level playing field for all private players including both within Finland and outside Finland is concerned?

At the moment, there are no plans in Finland to allow any gaming operators established outside Finland to provide any gaming services in the Finnish market.

But after the proposed changes come into force, it will still be legal for any Finnish citizen to play gaming services provided by gaming operators established outside Finland.

You have mentioned that despite the proposed prohibition against marketing of games connected with special risks for gambling problems, such as casino games, the Government gambling associations may continue to expose their brands and addresses to their Internet gambling sites, for instance by offering sponsorship, even after the changes come into force. This demonstrates the inconsistency of the Finnish gambling regulation. Can you expand on the current situation as far as advertising and promotion of online gambling brands in Finland is concerned?

Until now, many online gaming providers advertised their services in Finnish TV-channels aired outside Finland. But due to the proposed changes of the Lotteries Act many multi-media/TV groups in Finland have cancelled advertising and other cooperation agreements with gaming providers.

However, the Government gaming associations in Finland still conduct extensive and aggressive marketing measures of their gambling services yearly. Even though Veikkaus Oy has been criticised by the Commission, the company keeps strengthening its brand by sponsoring and advertising at sales points and sports venues etc.

How has European Commission’s responded to the proposed changes of the Finnish Lotteries Act? What are your expectations going forward?

Hopefully, the European Commission will follow up the submission of comments regarding the proposed changes of the Finnish Lotteries Act – submitted to the Finnish Government on 2 February 2009 – with a reasoned opinion.